\u3000\u3000 Chengdu Kanghua Biological Products Co.Ltd(300841) (300841)
Event overview:
The company issued the announcement of annual performance increase in 2021. In 2021, the company expects to realize a net profit attributable to the parent company of 808-840 million yuan, with a year-on-year increase of 98.02% – 105.86%; It is expected to realize a net profit of 538-570 million yuan, a year-on-year increase of 33.51-41.45%.
Analysis and judgment:
The company’s performance exceeded expectations, and the improvement of production capacity promoted the growth of human diploid crazy seedlings
According to the announcement of the company, the median net profit attributable to the parent company of the company in 2021 is about 816 million yuan. According to the third quarterly report of the company in 2021, the profit and loss from changes in the fair value of Aibo biological, a joint-stock company of the company, is 238 million yuan. Considering the investment income brought by changes in the fair value of Aibo biological Q4 and deducting relevant income tax, we expect the net profit attributable to the parent company in 2021 to be about 595-616 million yuan, Exceeded market expectations. The substantial growth of the company’s performance is mainly due to the weakening of the impact of the run on conventional vaccine batch issuance resources brought by covid-19 vaccine batch issuance, the significant growth of human diploid cell crazy vaccine batch issuance in Q4, and the large-scale growth of product sales. The rapid growth of the company’s net profit comes from the rapid and large-scale sales of human diploid cell rabies vaccine. At the same time, the company implements fine management, the cost rate decreases and the profitability is further enhanced. Human diploid cell rabies vaccine is the exclusive product of the company, and the production technology has strong technical barriers. Previously, due to the company’s capacity constraints, the number of batches of Chinese diploid cell rabies vaccine was relatively low, only 5% in 2020. With the continuous improvement of the company’s capacity utilization in recent years and the smooth operation of the new second workshop in June 2021, the company has opened the previously limited capacity bottleneck. At the same time, the company also has the construction of new production line of listed fund-raising projects. The production capacity is designed to be 6 million units / year and is expected to be completed in 2023. At that time, the company’s annual production capacity of human diploid cell rabies vaccine will reach 11 million units, which is expected to achieve a significant increase in the company’s sales.
Entering the field of pet vaccine, the rabies vaccine for pets has been officially delivered
Unlike traditional veterinary vaccines, large-scale breeding is highly sensitive to the price of vaccines. With the improvement of China’s social and economic level, for pet owners, the status of domestic pets in people’s hearts is gradually “anthropomorphic”, and pet owners pay very high attention to pet health. Through equity participation and signing strategic cooperation agreements, the company has entered the animal rabies vaccine industry. According to the information released by the “WeChat pet” WeChat official account, since the release of the “Hillis defense plan” in December 5, 2021, as of January 22, 2022, the number of hospitals that have registered for the Hillis defense program has exceeded 3000, so we can see that the company’s pet vaccine terminal is successfully promoted. At the same time, the company’s pet rabies vaccine has also been officially delivered. We believe that the sales of pet vaccine is expected to bring new increment to the company’s performance.
Investment advice
Considering that the company has broken through the bottleneck of production capacity restriction of human diploid cell rabies vaccine and the current low penetration rate of human diploid rabies vaccine, the company’s vaccine products are in a state of booming production and marketing. Without considering the non recurring profits and losses caused by the change of fair value of Aibo biology, the company will maintain the profit forecast. It is expected that from 2021 to 2023, The operating revenue of the company is 1.345 billion yuan, 1.989 billion yuan and 2.992 billion yuan, the net profit attributable to the parent company is 579 million yuan, 856 million yuan and 1.318 billion yuan, and the EPS is 643 million yuan, 9.51 million yuan and 14.64 yuan, corresponding to the share price of 217.32 yuan / share on January 24, 2022, and the PE is 34, 23 and 15 times. Maintain the “buy” rating.
Risk tips
The sales of human diploid cell rabies vaccine is less than the expected risk; The company’s production capacity construction plan is less than the expected risk; Risk that the progress of pipeline under research of the company is less than expected; Pet vaccine sales are less than expected risk.
